WTI $43.91 +33c, Brent $46.59 +74c, Diff -$2.68 +41c, NG $2.93 +4c
Just to say that next week the blog may be a touch intermittent as I am travelling for a few days, I will attempt to put out flash blogs if circumstances allow.
This week the oil price will likely end down around $3/4 as a result of the changes made by all three reporting bodies in which supply numbers rose and demand weakened. If they are accurate, and they rarely are, then supply and demand balance is unlikely until at least this time next year.
Yesterday and today both show a rather mixed bag of influences on the oil price. The follow up to the EIA inventory stats remained positive as inventory fell by 600/- against the scribblers guesses of a build of 3.8m even though gasoline and distillates both built stocks, the latter by 4.6m barrels. The product market is also pretty tight, gasoline futures rose when the Alabama pipeline remained shut after a leak and when BP announced that work goes on at its Whiting facility, cutting capacity by 50% of potential 413/- b/d firmed again. On the crude side the Government forces in Libya made gains and will now resume some modest exports. Finally Exxon are now offering some October crude after completing work on the pipeline.
Interims from Amerisur yesterday which were overtaken by news that the long-awaited OBA pipeline was finally being completed and was set to open ‘in the next few days’. Much later than expected for a number of reasons but lately primarily the severe flooding, the OBA will cut around $12 off opex and more importantly allow AMER to open up shut-in production and start talking to nearby producers for 3rd party tariff work. Expect production to rise from 4,500 b/d to a year end number of around 7,200 b/d and hopefully more afterwards. Amer has $56.1m of cash, no debt and an undrawn RBL, the news yesterday was well received as should such a transformational one for the company.
Range updated the market on their situation in Colombia yesterday stating that the consortium had responded in detail to ANH and remain confident of the outcome. In the worst case they have no assets in Columbia and are advised that they are safe under Aussie law as well.
I took the opportunity to meet with the company yesterday and am confident that they are slowly but surely continuing the rebuild phase of this process. When the final development well has been completed it will be time to concentrate on the waterflood operations which is where the 2,500 b/d target will deliver from. Whilst being seen as less transformational than development wells by some the waterflood projects when complete will make Trinidad a strong and steady business with self sustaining production and some exploration upside. Range have a lot on the go at the moment so expect plenty of announcements including publishing of accounts and operational updates. It has been a long haul but at the moment I am giving the company the benefit of the doubt.
Solo has announced this morning that it has raised £2m by a raise at 0.18p to a single institution, Epsilon Pty who will now have 15.9% of the equity. These funds will pay for their share of the costs of the Ntorya-2 well as well as paying down their YA debt which is always a reason to be cheerful.
Gulf Keystone has announced that its Open Offer was fully subscribed, thus ensuring that the company receives its $25m, not enough but head above water for at least the time being.
Circle Oil has announced that the recently damaged gas pipeline has been repaired and that production resumed yesterday.
Providence Resources announced yesterday that they are tendering for the deepwater rig for the drilling of Druid next summer. The cost looks like being around $35m going up to $50m if they drill the deeper Dromberg prospect.
Sound Oil also released their results yesterday and these were even more immaterial than most others you see. The discovery in Morocco has been a game-changer and the company has been smart enough the take up a significant amount of acreage at Meridja for example. With Sid Moktar and Badile both being prepared to drill, prospects remain very exciting for the two other areas but to be frank any further success in Morocco would be icing on the cake, valuation of this share might still be significantly less that possible given current circumstances.
EnQuest announced that discussions with Delek group with regard to a possible farm-out of the Kraken prospect have been terminated.
And Ophir also reported yesterday where production was 11/- boe/d and cash flow is extremely strong, Ophir has $407m of cash and $200m of debt to draw. Right now the company is battening down the hatches saying that it is returning to a more ‘considered more prudent pace of exploration.
Finally, after a torrid couple of weeks following two results in East Texas I managed to persuade Jay Cheatham, CEO of Pantheon Resources to drop by the TipTV studio to try and give us a chance to get out heads around it.
TipTV CEO interview: Jay Cheatham of Pantheon Resources
It’s another busy weekend of sport coming up as the Paralympics wind to a conclusion.
Last night the Red Devils played in a rather boring way and paid the price, losing to a comedically offside goal. In the Prem the big game is tonight, not sure i am yet into Friday night but you never know, tonight’s offering is Chelski v the HubCap Stealers. Hull City Tigers get the Gooners tomorrow whilst the Foxes host Burnley and the Cherries go to the Noisy Neighbours.
It’s the Singapore GP this weekend and with all to play for ypu pays your money and takes your choice….
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